All Forum Posts by: Kamlesh G.

Hmmmm, Joy and Kilz... The inspector mentioned that the mold may have gotten into the walls, due to improperly sealed fixtures. So based on his suggestion we didnt want to move forward unless the price was significantly cut to cover repairs and mold removal.
Thanks for the input mikeOH.

So my partner and I finally get our offer accepted and move to the due diligence phase. We meet the inspector at the property. Get access to first unit, its a 4-plex. We are surprised to find out that the tenant had been there for 20 years. THe current owner hasnt replaced carpet, appliances nor services HVAC in years. BUt the thing that kicks the bucket is the amount of mold we discover growing in the bathroom.
Its even made it into the bedroom next door. Needless to say we stopped inspection there, and made it clear to broker, clean up mildew or we walk.
Seller responded, by asking if inspector does commercial properties?
We are like WTF does that have to do with it. MOLD is MOLD...
SO we walked, anyone have encountered issues like this?
ANyone have experience in cleaning up mold, we would like to know the price for cleaning up mold, and if it is persistent? THanks..

The property in mind would be a 4-plex, so does that 80% LTV still hold true? Quick newbie question, Do banks appraise plexes based on NOI or based on resale?

:idea: I was thinking of a way to expedite my REI purchasing power.
What do you guys think of buying a property slightly below true value.
Then after 6-12 months of seasoning the loan, refi out the full value of the property. To the extent that the NOI Meets 120% of the mortgage.

Is this feasible in todays mortgage market. I would only do so if the cash would cover my initial DP plus closing costs. Any other pitfalls I would have to look out for? TIA...

Mike,
The calculations we are taking are as follows:

$2200 GMR
- 200 est. taxes
=$2000 rent.

==> we have $2000 to put towards the debt service.
So this would make a basis of $320,000, Now we would deduct any repairs the property would require. Such as a new roof, some sheet rock repair, etc... So we would make an offer of $299,000, pending inspection.
If inspection brings up more issues, then we would in turn deduct the repair/replacement costs.

So we would be have a monthly interest only payment of $1868.75 at 7.5%.
Leaving a reserve of $131.25 to save for repairs and what not. And the next lease will be at a higher rent, after some major clean up and some renovations are done. Property is in pretty dirty condition. Now on the upside, we are going to try to use driveway to charge for parking, due to lack of parking in most of the other rentals.

I've been on and off the forums for 6 months now. And i've gotten back in recently. My questions is how in the world can you justify the 2% rule in a metro area? Im looking at a SFH, split into 3 units, 3 blocks from a major university in downtown. Would estimate 90%+ homes are rentals. So here are the facts:

asking: $350k
rent: $2200/month = 1@1100, 2@550
built: 1955

At th 2% rule this property is worth: $110,000!!!!!

The tax appraisal comes in at $120k ( $60k for land, $60k for building)

Avg Home Price in my city is $250k, let alone this location.

How in the world does any REI justify this price, and they are selling around this price as well.

Please please please, help me to understand this logic.

Hello guys,
I am looking at purchasing 1 of 4 quad-plexes in a small college town.
Although the target demographics are not from the college, it is in the lower-income neighborhood. I am very skeptical of purchasing property in such a poorly maintained neighborhood, and being an absentee landlord. The building was built in 1982, and in fair shape. What are your thoughts on doing an absentee ownership in a fairly degraded neighborhood. FYI the ROI is 20% with 5% down.

I've heard of this concept on Carlton Sheets Cd's, but was a bit skeptical.
I know this seller is willing to do some seller financing, but would a bank agree to this? Between me and my partner we have 650 Credit Score, and this property already has a DCR of >1.25. So i believe we have the borrowing power, any tips on how to spin this to the bank to get approval?

Gotcha, makes more sense now. To good to be true.
Broker got back saying existing loan payoff is $240k, she thought i was a broker. Just made another new'b mistake, assumed we could get 95% financing, due to great debt coverage ratio, based on false expenses and vacancy rates! So basically now i know that 5+ units require commercial loans that have a hard set rule of 20% down. Any creative ways around this?

That vacancy rate was provided by broker/seller, unconfirmed.
The power is sub-metered, owner responsible for powering exteriror lights and such. Unsure of water, broker wont return calls :badwords:

im a newbie, so teach mE!